Dear Lifehacker,I'm thinking of signing up for Amazon Prime, but I'm not sure if I'll actually use it enough to justify the $99 yearly fee. How much do I need to buy from Amazon before the service pays for itself?

Sincerely,Prime Ponderer

Dear PP,If you ask most members of Amazon Prime, they'll argue endlessly on behalf of the service. That said, not everyone ought to sign up. To give you a quick answer, you'll benefit from the service if you purchase items from Amazon 10-20 times per year, average under $25 per order, and care about getting your stuff in less than a week. You'll also benefit if you want to pay for Amazon's alternative to Netflix—Amazon Instant Streaming—which they include as a membership benefit. As a result, you get two very different services that make it difficult to assess Prime's actual value. In the end, you'll find the service worth it if either benefit proves even remotely useful to you. Let's break down both services to get a more specific idea of what $99 per year gets you.

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Update: Amazon Prime, which used to be $79 a year, has gone up to $99 a year. As such, we've updated the math in this post to reflect the new pricing.

Breakdown: Prime Shipping Benefits

Amazon Prime's shipping benefits only matter to those who care about how fast they get their stuff. If you consider yourself reasonably patient, know that your patience must last you a good week or so. Anyone can get free shipping from Amazon if they order $25 or more from the online retailer and choose Super Saver shipping at checkout. While this option costs you nothing outright, it takes 5-10 business days (on average) to receive your items—except when you preorder certain products that offer free release date delivery. If you never tack on something you don't need just to meet the $25 minimum, you don't mind waiting, and never preorder anything, you don't need Prime's shipping benefits.

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But let's say you want your stuff faster than 5-10 business days and sometimes you struggle to meet that $25 minimum—will Prime save you money? Let's talk a look:

Standard shipping costs a minimum of $3.99 per shipment regardless of what you buy. Depending on the items in your cart, that cost goes up. For example, apparel always starts at a base price of $3.99 per shipment whereas computers start at $7.99

On top of standard per-shipment costs, you'll pay a little bit for each item. For example, apparel costs $1.49 per item and computers cost $0.65 per pound (meaning a 13" MacBook Air costs an additional $4.16 and an HP Pavilion p6-2310 Desktop $12.09).

If you want faster shipping, you'll sometimes pay twice the base cost per shipment ($7.99 for apparel, $10.99 for computers for two-day shipping) and a higher per-item cost as well. You can see the full breakdown on Amazon's help page.

So what does this all amount to? It really depends on your individual usage and how fast you want your stuff. Standard shipping has half the lead time of Super Saver, but it doesn't offer a huge advantage for a service that costs more. Two-day, on the other hand, costs quite a bit more but offers significant time savings. Let's take a look at how much certain options will cost you with a very modest look at what an average shopper might buy over the course of a year:

If you buy things online, you probably order more from Amazon on a yearly basis. This modest list comes out to 12 separate shipments. Obviously you could combine a few and grab the free Super Saver shipping, but we want to keep things simple. Let's take a look at yearly costs based on the above shopping list:

If you went with Super Saver shipping whenever possible and only paid for standard when necessary, you'd pay $42.50 in total for the year—not enough to justify the cost of Prime.

If you always paid standard shipping, you'd pay $67.50 in total for the year—not enough to justify the cost of Prime.

If you paid standard shipping for everything but the computer and your computer peripherals, opting for two-day for those items because you wanted them in a hurry, you'd pay $80 for the year—not quite enough to justify the cost of Prime.

If you wanted two-day shipping on everything you ordered, you'd pay $159 for the year—more than enough to justify the cost of Prime.

While this list won't match up with anyone's shopping needs exactly, it gives you a look at the cost of Prime under modest circumstances with pretty clear results. If you order from Amazon 10-20 times per year and opt for expedited shipping a couple of times, you'll break even if you get Prime. If you opt for expedited shipping always, or even most of the time, you'll save a lot of money. In the end, it comes down to how fast you want your stuff. If you can't wait a week, Prime's shipping benefits more than pay for themselves.

These numbers can change very quickly, however, if you share your Prime membership with others. Because Prime allows you to invite four other members in your household—not that Amazon actually prevents you from inviting someone across the country—you could split the costs with others and pay as little as $25 per year for your benefits. If you do this, getting Prime is pretty much a no-brainer.

Breakdown: Prime Instant Streaming

Netflix charges a monthly fee of $7.99 per month, which comes out to $95.88 per year. Amazon Prime costs $99 per year, which comes out to about $8.25 per month. Forgetting the nice shipping benefits you get with Prime, you pay about the same. If both services had the same library of options, you could justify a Prime membership in an instant. Things get a little more complicated because Prime lets you stream some content but Amazon's video-on-demand (VOD) service chargers you per episode.

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Netflix wins on content by a long shot. They have exclusive access to a variety of popular shows—albeit some time after they air. That said, Amazon's catching up. Downtown Abbey, a previous Netflix exclusive, now streams on Amazon to Prime members for free. Both offer original content, and both services received an Emmy for their efforts, but Netflix's own programming tends to gain more press and popularity due to the revival of cult hits like Arrested Development and providing an outlet for established talent (House of Cards, Orange is the New Black). At the moment, Amazon's best known for killing Zombieland. While Prime may suffer somewhat on content, its constant growth may level the playing field in the next year or two.

Unfortunately, Netflix also has the advantage of slightly greater support for set top boxes and mobile platforms. That said, Amazon does offer a wide variety of content sooner than Netflix if you want to pay for it on demand and the ability to borrow certain books for use with Kindle devices and apps. With the extra money you save, you can pick up a few TV shows and movies while still paying less than Netflix.

The Verdict

When deciding whether or not to sign up for Amazon Prime, your own needs play a major role. It mostly comes down to this: if you want expedited shipping on most of your Amazon orders, can find the content you want to watch on their Instant Streaming service, or both, you should get it. If neither of those circumstances apply to you, Prime probably isn't a worthwhile investment. Take a look at your shopping history at Amazon and find out how much you spent on shipping in the last year. Look at what you watch on Netflix (or on television, for that matter) and see if Amazon offers the same stuff. This information will quickly reveal whether or not you should sign up, as demonstrated in the example breakdown earlier. If you can split your Prime membership with many others, that may drive down the cost to make it more than worthwhile. If you fit the bill, you'll love Prime. If not, be glad you're saving $99 a year on something you don't need. If you're not sure, however, you can always try it out for a few months for free and see if you like it.